Labour Market Testing in Practice

by 27 Feb 2014
Businesses that employ foreign nationals are being impacted by the new labour marketing testing (“LMT”) requirements, introduced by the Department of Immigration and Border Protection (“DIBP”) in November 2013. Here we provide an overview of how LMT is affecting business in practice.

Labour Market Testing Condition

Unless an exemption applies, employers are now required to show that they have tested the Australian labour market to prove whether a suitably qualified, experienced Australian citizen or permanent resident (or eligible temporary visa holder) is available to fill the position.

LMT must be undertaken in the 12 months before a nomination is lodged for the requirement to be satisfied. However, if the employer has had retrenchments or redundancies in the four months before lodging their nomination application, LMT evidence must post date the retrenchments and redundancies.

Applications and Exemptions

LMT is required for most occupations related to engineering and nursing, as well as all occupations at ANZSCO Skill Level 3 (generally requiring a Certificate IV) or below (e.g. trade based roles).

However, there are a number of exemptions, such as where testing requirements are inconsistent with Australia’s international trade obligations and for visa applicants who would assist with relief and recovery after a disaster.
If you would like more guidance on whether your occupation is LMT-exempt, we will be happy to provide you with our exemption flow chart.

What LMT evidence should be provided?

To demonstrate that your business has undertaken LMT, your application must include evidence. This can comprise:
  • Where advertising / recruitment took place
  • Period / dates of advertising / recruitment
  • Fees paid and to whom
  • Geographical target audience
  • Number of applications received
  • Number of applicants hired
  • Reasons candidates were not successful
This type of information is sufficient for DIBP case officers to note that LMT has been undertaken and to make a decision on an application. Copies of advertisements or similar are not generally required.  

Impact on 457 visas

The LMT requirements can impact new 457 applications, renewals of 457 visas, and existing employees moving from another visa type to a 457 visa or moving from one business entity to another following a corporate restructure, merger or acquisition.

In these situations, a business may not have tested the market for the nominated role and there may be no legislated exemption.

Fortunately, the DIBP is taking a common sense approach where companies have tested the labour market. It has been accepting various types of evidence in light of contemporary business practices, advertising and recruitment.

Some examples include accepting evidence of LMT for the same or similar positions within the wider business or an associated entity. Furthermore, in the case of an employee renewing their 457 visa (which falls outside the renewal exemption), the DIBP has accepted evidence of recruitment efforts in other areas of the business relevant to the position.

Plan ahead

To comply with the LMT provisions – and for minimal impact upon your business – it is important to review your 457 visa population, identify upcoming renewals where LMT will be required, and plan ahead to ensure that you provide satisfactory LMT evidence.